Supervalu Inc. (NYSE:SVU) stock took a hit today when the company announced a lowered outlook for fiscal 2017.
Supervalu said that it now expects its adjusted EBITDA for the full year of fiscal 2017 to be 5% lower than last year. Adjusted EBITDA reported by the company for the full year of fiscal 2016 was $771 million. The new outlook for fiscal 2017 would have adjusted EBITDA coming in at roughly $732.45 million.
SVU attributed its lowered outlook for fiscal 2017 to a variety of factors. It noted that its retail segment for the second quarter of fiscal 2017 has been more negatively affected than it expected. This includes more competition from rivals.
Supervalu also noted that its Save-A-Lot segment was hit by deeper levels of deflation in the second quarter of fiscal 2017. During this time, the company said that it also received less benefits from the supplemental nutrition assistance program (SNAP) than it had in the first quarter of the fiscal year.
Save-A-Lot is also undergoing store resets during the second quarter of fiscal 2017. These resets are behind some of the negative impact, but are expected to help sales later in the year. The company is also predicting positive contributions from its Wholesale segment in the fourth quarter of fiscal 2017.
“Although we are seeing softness in portions of our business, I am excited and encouraged by the recent announcements pertaining to new customers for our core Wholesale segment and the opportunities that exist to further grow that business,” Supervalu CEO Mark Gross said in a statement. “In addition to the already announced two new large customers, we have recaptured some previously lost business from two other customers. We look forward to adding the volume from these new customers and do not expect any meaningful customer losses for the remainder of this fiscal year.”
SVU stock was down 8% as of Thursday afternoon.
